Reports of The BBC preparing to offer £1,000 to each of contractors it engages to help them with the costs associated with IR35 has been met with caution.

Contractor tax specialist, Qdos Contractor, has questioned whether it is enough to reimburse those wrongly working inside IR35.

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A national newspaper has reported that contractors earning under £45,000 will receive compensation from the broadcaster, which amounts to £1 million of licence fee money in total, as workers pay extra tax and increased accountancy fees while working inside IR35.

This follows the introduction of controversial rules in the public sector for those bodies using contractors. The tightening up came about as a result of concerns about the number of public sector bodies, including the BBC, who were giving employees contractor status in order to benefit from tax advantages.

Qdos Contractor CEO, Seb Maley, said: “On the face of it and assuming these reports have substance, that the BBC to a certain degree seems to now understand the impact of IR35 on all contractors - and not just the highest earners - is at least a positive step in the right direction.

“That said, the speculated £1,000 compensation is frankly nowhere near enough to fully reimburse any contractors who have spent a substantial period of time incorrectly working inside IR35, which can increase costs for these workers by up to 30 per cent.

“Contractors might well take the BBC up on this offer, but any of these workers wrongly placed inside IR35 by the organisation will be left wondering why they couldn’t make an accurate status decision in the first place.

“Any company engaging a contractor must learn from reported mistakes made by the BBC, when all public sector engagers were made responsible for setting IR35 status last year.

"This tax legislation is a huge burden for contractors, both financially and psychologically, while the cost of incorrect status decisions to companies can quite easily lead into their millions.”

Qdos Contractor research has previously revealed that just 27 per cent of contractors would work with the BBC given the organisation’s reported handling of IR35.